Question
M4-11 Preparing Journal Entries for Deferral and Accrual Adjustments 1. show all calculations 2. prepare T-Accounts and their balances. Service Pro Corp. (SPC) is preparing
M4-11 Preparing Journal Entries for Deferral and Accrual Adjustments
1. show all calculations
2. prepare T-Accounts and their balances.
Service Pro Corp. (SPC) is preparing adjustments for its September 30 year-end. For the following transactions and events, show the September 30 adjusting entries SPC would make.
(If no entry is required for a transaction/event, select No Journal Entry Required in the first accounting field.)
a) Prepaid Insurance shows a balance of zero at September 30, but Insurance Expense shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy purchased on September 1 of the current year.
b) On August 31 of this year, Cash was debited and Service Revenue was credited for $1,500. The $1,500 related to fees for a three-month period beginning September 1 of the current year.
c) The companys income tax rate is 20%. After making the above adjustments, SPCs net income before tax is $10,000. No income tax has been paid or recorded.
E4-3 Recording Initial Transactions and Subsequent Adjustments
During the month of September, the Texas Go-Kart Company had the following business activities. Prepare the journal entry, if any, required to record each of the initial business activities on September 1. Prepare the adjusting journal entries, if any, required on September 30. prepare T-Accounts and show balances and calculations.
a) On September 1, paid rent on the track facility for six months at a total cost of $12,000. Date Account Title Classification (A-L-SE-R-E) or Debit or Credit Amount Sept. 1
b) On September 1, received $60,000 for season tickets for 12-month admission to the race track. Date Account Title Classification (A-L-SE-R-E) or Debit or Credit Amount Sept. 1
c) On September 1, booked the race track for a private organization that will use the track one day per month for $2,000 each time, to be paid in the following month. The organization uses the track on September 30. Date Account Title Classification (A-L-SE-R-E) or Debit or Credit Amount
d) On September 1, hired a new manager at a monthly salary of $3,000, to be paid the first Monday following the end of the month. Date Account Title Classification (A-L-SE-R-E) or Debit or Credit
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